Should I Sell the House Before or After the Divorce?

Should we sell the house before the divorce, or should I try and keep it to sell down the road?”

If you’re facing divorce, you’ve already got a lot on your plate. One of the biggest ones is probably the simple question:

Who’s going to get the house?

Should you sell it before the divorce? Or will you get more money if you wait until afterwards?

As you continue reading this article, you’ll learn:

What your choices are

Pros and cons of selling or keeping the house

When you should sell it and why

Disclaimer: I am not a lawyer or a realtor. I recommend you consult a professional for the final say on what to do with your house.

Because of this, we’re going avoid legal mumbo-jumbo and talk man-to-man about this significant aspect of your divorce.

Let’s go ahead and get started, shall we?

When it comes down to it, you only have two choices:

You can sell the house before the divorce, which usually means you and your wife split the profit.

You can sell the house after the divorce, which usually means the person who got the house keeps the cash.

Choice #1:
Selling the House Before the Divorce

This is probably what your divorce attorney and accountant will recommend, but it’s not always the right move. There are some cases where you’d make more money by holding off the sale.

So, let’s go talk about the pros and cons of selling the house before the divorce.

Why Sell Your House Before the Divorce?

Reason #1 – Higher Tax Write Off

If you sell your house before the divorce, most states allow you to write off up to $500,000 from the current year’s taxes. If you sell your house after the divorce, your maximum write-off drops down to $250,000.

Reason #2 – No Worrying About Equivalent Exchange

If you sell the house before the divorce, then you and your wife have a concrete amount of money to split between the two of you. You have the money in hand, you can divide it right in half, and that’s that. If you kept the house, you’d have to negotiate for equivalent exchange.

Reason #3 – Put the Past Behind You

Perhaps the most compelling reason to sell your house before the divorce is that it will allow you to cut yourself permanently away from your old life. That way, once the divorce is over you don’t have to worry about it; you can move on with your life free from ties to the past.

All right, now you understand the reasons for why you should sell the house before the divorce, and how that can affect the average cost of divorce.

Now let’s talk about the reasons why you’d keep the house and wait until after the divorce to sell.

Choice #2:
Sell the House After the Divorce

There are pros and cons to both ways of handling the house, so take some time to read through the list below and really think about which option makes more sense.

Why Sell the House After the Divorce?

Reason #1 – Property is a Great Investment

In the long-term, the value of property always rises. If you wait until after the divorce to sell your house, then you can make a lot more money by allowing the value of your property to rise. However, some states don’t allow you to keep all of the profits, even if you’re divorced.

Be sure to check with your lawyer for more information on your State’s alimony laws.

Reason #2 – One Less Thing to Worry About

Divorce is a stressful time for everyone. You don’t need the volatility of the real estate market on top of that right now. If you and your wife can easily agree on an equivalent exchange for the house, you may appreciate waiting for a more stable time to get caught up in the world of realty.

Reason #3 – Someplace to Live

In other words, you’ll never do the stereotypical couch-surfing that many men resort to when they’re going through divorce. You’ll sleep in your own bed, in your own house, and you’ll never need to worry about finding a cheap apartment or a friend/relative to stay with.

Whether you sell the house before or after the divorce is a choice you and your wife will have to make together.

If you can’t make up your mind, I recommend selling the house before the divorce to take advantage of the bigger tax write off and the ability to completely move on after everything’s said and done.

So to recap the article:

You can’t keep everything. Whether you sell or keep the house, your wife will end up with an approximately equivalent exchange unless you’re willing to wait a long time.

If you sell the house before the divorce, you get a bigger tax write off, and you get to move on from your previous life as soon as the divorce papers are signed.

If you sell the house after divorce, you won’t have to worry about finding a new place to live and you could make more money down the road as the value of your property goes up.

Whatever you decide to do from here, I wish you the best of luck. I hope that your divorce stays amicable, but more so I hope that you come out of it in one piece, ready to move on and leave your mark on the world.

Even though things seem dismal right now, keep your eye on the big picture.